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Bridges Fund Management

PRI reporting framework 2020

You are in Direct – Private Equity » Overview

Overview

PE 01. Description of approach to RI

01.1. Provide a brief overview of your organisation’s approach to responsible investment in private equity.

Bridges is a specialist fund manager dedicated to sustainable and impact investment. We therefore use an impact-driven approach to create returns for both investors and society-at-large across all our funds. While we select companies that will generate our intended outcomes in line with our primary impact-driven investment thesis, we also recognise that every investment has the potential to generate other societal outcomes, both positive and negative.

Prior to making an investment, our investment team works with the management team of the prospective portfolio company to identify ESG risks and opportunities for value creation. To guide this discussion, we have developed an in-house risk assessment screen based on global best practices but adapted to fit the needs of investees operating in our areas of thematic focus. Our emphasis is on making this ESG risk screen as practical as possible - on making it a conversation about operational excellence. We use a materiality lens to grade each risk as a high, medium or low priority and record the results on a risk register. For each material risk, we propose a mitigation plan in the Investment Committee paper, so that our investment decision is made with a holistic view of projected impact and a 100-day plan can be developed. Thereafter, ESG issues are reviewed regularly at Board meetings with investee companies, as well as at our own firm-level portfolio review meetings. Once a year, each investee provides a snapshot of any new or outstanding ESG issues, as well as progress against targets, through our Impact Scorecard.

 


PE 02. Investment guidelines and RI

02.1. Indicate whether your organisation’s investment activities are guided by a responsible investment policy / follow responsible investment guidelines.

02.2. Describe how your organisation outlines expectations on staff and portfolio companies’ approach towards ESG issues in investment activities.

We seek to encourage the companies we invest in to be responsible towards all their stakeholders, in the belief that this is in the interests of the companies as well as their communities. While we select companies that will generate our intended outcomes (whether through the products or services that they provide, or the economic growth that they generate in underserved markets), we recognise that every investment has the potential to generate other societal outcomes, both positive and negative. We take these outcomes – environmental, social and governance (ESG) factors, into account in order to understand an investment’s total impact. ESG risks and opportunities are examined in partnership with the management team of the prospective portfolio company prior to making an investment and based on our internal risk assessment we create an appropriate action plan to address each issue. ESG factors are reviewed regularly at Board meetings with investee companies, as well as at our own firm-level portfolio review meetings. Once a year, each investee provides a snapshot of any new or outstanding ESG areas, as well as progress against targets.


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